IRS Initiatives to Enforce Tax Compliance Among High-Income Individuals

In recent years, the Internal Revenue Service (IRS) has intensified its efforts to enforce tax compliance, particularly targeting high-income individuals and families. This renewed focus has been largely enabled by funding from the Inflation Reduction Act (IRA), which has provided the IRS with the necessary resources to address tax evasion and ensure that wealthy taxpayers pay their fair share.


Targeting High-Income Non-Filers

In February 2024, the IRS launched a new initiative aimed at high-income taxpayers who have failed to file federal income tax returns. This effort targets over 125,000 cases involving individuals with significant financial activity who have not filed returns since 2017. Among these, more than 25,000 involve individuals with incomes exceeding $1 million, while over 100,000 cases pertain to those earning between $400,000 and $1 million annually. These actions are part of a broader strategy to address non-compliance and promote fairness in the tax system.


Strengthening Enforcement with New Resources

The IRS has been able to strengthen its enforcement capabilities thanks to IRA funding. This includes hiring additional skilled accountants and leveraging advanced technology to identify and address tax evasion. The agency is now equipped to conduct more thorough investigations and audits, particularly focusing on complex financial arrangements and large corporate entities. This enhanced enforcement is expected to close significant gaps in tax compliance that have widened over the past decade due to budget constraints​.


Notable Enforcement Actions

Several high-profile enforcement actions have underscored the IRS’s commitment to holding high-income individuals accountable. Recent cases include substantial restitution orders and prison sentences for individuals who engaged in elaborate tax evasion schemes, such as falsifying business expenses to fund luxury lifestyles and skimming business revenues for personal use. These actions demonstrate the IRS’s ability to effectively identify and prosecute tax evasion among the wealthy​.


Focus on Large Corporations and Partnerships

In addition to individual high-income earners, the IRS is also targeting large corporations and complex partnerships. Initiatives include increased scrutiny of transfer pricing practices among U.S. subsidiaries of foreign corporations and the expansion of the Large Corporate Compliance program. These efforts aim to ensure that large entities accurately report their income and pay the appropriate amount of taxes. By using data analytics and artificial intelligence, the IRS is better positioned to identify high-risk areas and deploy resources where they are most needed​.


Modernizing Taxpayer Services

To support these enforcement efforts, the IRS is also committed to improving taxpayer services. This includes expanding in-person services, enhancing online tools, and providing more comprehensive guidance to help taxpayers comply with tax laws. By making it easier for taxpayers to understand and meet their obligations, the IRS hopes to reduce errors and improve overall compliance​.


In summary, the IRS’s recent initiatives represent a significant shift towards more rigorous enforcement of tax laws among high-income individuals and large corporations. With increased funding and advanced technology, the agency is better equipped to address tax evasion and ensure that all taxpayers contribute their fair share to the nation’s revenue.


For more detailed information, you can visit the IRS’s official announcements on their website: IRS News Releases.

Contact Us

WK Tax Service helps individuals and businesses track their records for business and budgeting purposes as well as for tax purposes. Contact Mike Tavabi today to help get your financial house in order. We are happy to help simplify your life and help you be prepared to file your tax returns on time.

Contact: Mike Tavabi

Company: WK Tax Services

Phone: (310) 539-1068
Fax: (310) 988-2624

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